Preface
1ANINTRODUCTIONTOINTERNATIONALTRADE
CharacteristicsofNationalEconomies
EconomicGrowth
InternationalTrade
TheDirectionofInternationalTrade
WhatGoodsDoCountriesTrade?
Summary
Exercises
InternetApplications
2TOOLSOFANALYSISFORINTERNATIONALTRADEMODELS
SomeMethodologicalPreliminaries
TheBasicModel:Assumptions
TheBasicModel:Solutions
ITEM2.1:RELATIVEPRICESINSAUDIARABIA
MeasuringNationalWelfare
NationalSupplyandDemand
ITEM2.2:MEASUREMENTOFREALINCOME
Summary
Exercises
InternetApplications
3THECLASSICALMODELOFINTERNATIONALTRADE
AbsoluteAdvantageasaBasisforTrade:AdamSmith'sModel
ComparativeAdvantageasaBasisforTrade:DavidRicardo'sModel
TheGeneralEquilibriumSolutionoftheClassicalModel
TheGainsfromInternationalTrade
ITEM3.1:JAPAN'SGAINSFROMENTRYINTOWORLDTRADEIN1858
TheRelationshipbetweenTradeandWages
ITEM3.2:WAGEANDPRODUCTIVITYCOMPARISONSFORTHE
UNITEDSTATESANDMEXICO
AnEvaluationoftheClassicalModel
Summary
Exercises
InternetApplications
APPENDIX3.1TheClassicalModelwithManyGoods
APPENDIX3.2OfferCurvesandtheTermsofTrade
4THEHECKSCHER-OHLINTHEORY
TheHOModel:BasicAssumptions
ITEM4.1:CAPITAL/LABORRATIOSOFSELECTEDU.S.INDUSTRIES
ITEM4.2:CAPITAL/LABORRATIOSOFSELECTEDCOUNTRIES
TheHOTheorem
EquilibriumintheHOModel
SomeNewHOTheorems
ITEM4.3:TRADE,WAGES,ANDJOBSINTHEU.S.ECONOMY
SomeFinalObservations
Summary
Exercises
IntemetApplications
APPENDIX4.1AlternateProofsofSelectedHOTheorems
APPENDIX4.2TheSpecificFactorsModel
5TESTSOFTRADEMODELS:THELEONTIEFPARADOX
ANDITSAFTERMATH
TestsoftheClassicalModel
TestsoftheHOModel
AttemptedReconciliationsofLeontief'sFindings
OtherTestsoftheHOModel
RecentTestsoftheHOModel
AlternativeTheoriesofComparativeAdvantage
HumanSkillsTheory
ProductLifeCycleTheory
SimilarityofPreferencesTheory
IntraindustryTrade
IncreasingReturnsandImperfectCompetition
Conclusions
Summary
Exercises
References
IntemetApplications
6TARIFFS
TheGainsfromFreeTrade
Tariffs:AnIntroduction
Tariffs:AnEconomicAnalysis
TheGainsfromFreeTrade:OneMoreTime
TheWelfareCostofTariffs
ITEM6.1:THEWELFARECOSTSOFTARIFFS:SOMERECENTESTIMATES
FROMCERTAINU.S.INDUSTRIES
SomeComplications
TheOptimalTariff
ITEM6.2:THESMOOT-HAWLEYTARIFFANDITSAFTERMATH
HowHighAreTariffs?
EffectiveRateofProtection
Summary
Exercises
References
InternetApplications
APPENDIX6.1TheImperfectSubstitutesModel
7NONTARIFFBARRIERSANDARGUMENTSFORPROTECTION
Quotas
TheWelfareEffectsofQuotas
TheEquivalenceorNonequivalenceofTariffsandQuotas
OtherNontariffBarriers
ExportSubsidies
GovernmentProcurementPolicies
HealthandSafetyStandards
FailuretoProtectIntellectualPropertyRights
ITEM7.1:U.S.-CHINESEDISPUTESOVERINTELLECTUAL
PROPERTYRIGHTS
HowImportantAreNontariffBarriers?
ArgumentsforProtection
InvalidArguments
ValidArguments
Summary
Exercises
References
InternetApplications
8COMMERCIALPOLICY:HISTORYANDPRACTICE
HistoryofU.S.CommercialPolicy
ITEM8.1:THEGATTAGREEMENT
TheUruguayRoundandtheCreationoftheWTO
TRADEPOLICYCASESTUDY1:U.S.TUNAQUOTASTOSAVEDOLPHINS
TheConductofU.S.CommercialPolicy
Dumping
AntidumpingLaw
TRADEPOLICYCASESTUDY2:COMPUTERDISPLAYSCREENS
CountervailingDutyLaw
UnfairForeignPractices:Section301
TRADEPOLICYCASESTUDY3:U.S.-EUBANANASDISPUTE
TheEscapeClause:Section201
OtherMeasures
ComparisonswithPoliciesinOtherCountries
Summary
Exercises
References
InternetApplications
9PREFERENTIALTRADEARRANGEMENTS
PreferentialTradeArrangements:EconomicAnalysis
NorthAmericanFreeTradeAgreement
ITEM9.1:DETAILSOFTHENAFTA
NAFTAandtheU.S.Economy:SixYearsLater
EuropeanUnion
TheEUGovernment
TheEurope1992Initiative
RegionalismversusMultilateralism
ITEM9.2:OTHERPREFERENTIALTRADEARRANGEMENTS
Summary
Exercises
References
IntemetApplications
10INTERNATIONALTRADEANDECONOMICGROWTH
TradeandDevelopment
Primary-Export-LedDevelopmentPolicies
Import-SubstitutionDevelopmentPolicies
Outward-LookingDevelopmentPolicies
ITEM10.1:OUTWARD-LOOKINGVERSUSIMPORT-SUBSTITUTION
GROWTHPOLICIES
TradeandGrowth
TradeandGrowth:SomeAdditionalComments
TechnologicalChange
Growth,Prices,andWelfare
ITEM10.2:THEDUTCHDISEASE
InternationalFlowsofFactors
Labor
Capital
EconomicAnalysis
Summary
Exercises
References
IntemetApplications
11ANINTRODUCTIONTOINTERNATIONALFINANCE
TheBalanceofPayments
ExchangeRates
PricesandExchangeRates
InterestRatesandExchangeRates
AdditionalMajorTopics
Summary
Exercises
IntemetApplications
12THEBALANCEOFPAYMENTS
CurrentAccount
FinancingtheCurrentAccount:TheCapitalAccount
NationalSaving,Investment,andtheCurrentAccount
ITEM12.1:THEWORLD'SLARGESTDEBTOR
AdditionalSummaryMeasures
TransactionsClassification
Balance-of-PaymentsEquilibriumandAdjustment
Summary
Exercises
References
IntemetApplications
13THEFOREIGN-EXCHANGEMARKET
SpotRates
ITEM13.1:BID-ASKSPREADSANDPOLITICS:THESOUTH
AFRICANRAND
Arbitrage
ForwardRates
Swaps
TheFuturesMarket
Foreign-CurrencyOptions
Central-BankIntervention
BlackMarketsandParallelMarkets
ITEM13.2:DOLLARSFORDINARS
Summary
Exercises
References
IntemetApplications
APPENDIX13.1ExchangeRateIndexes
14PRICESANDEXCHANGERATES:PURCHASING
POWERPARITY
AbsolutePurchasingPowerParity
ITEM14.1:THEU.S.CONSUMERPRICEINDEX
RelativePurchasingPowerParity
Time,Inflation,andPPP
ITEM14.2:HYPERINFLATIONINBOLIVIA
DeviationsfromPPP
"Overvalued"and"Undervalued"Currencies
Summary
Exercises
References
InternetApplications
15EXCHANGERATES,INTERESTRATES,ANDINTERESTPARITY
InterestParity
InterestRatesandInflation
ITEM15.1:LENDERSANDBORROWERS,LOSERSANDWINNERS
ExchangeRates,InterestRates,andInflation
ExpectedExchangeRatesandtheTermStructureofInterestRates
Summary
Exercises
References
InternetApplications
APPENDIX15.1TaxationandInterestRateParity
16FOREIGN-EXCHANGERISK,FORECASTING,ANDINTERNATIONAL
INVESTMENT
TypesofForeign-ExchangeRisk
ForeignExchangeRiskPremium
MarketEfficiency
Foreign-ExchangeForecasting
InternationalInvestmentandPortfolioDiversification
DirectForeignInvestment
CapitalInflowIssues
InternationalLendingandCrisis
Summary
Exercises
References
InternetApplications
17BASICTHEORIESOFTHEBALANCEOFPAYMENTS
TheElasticitiesApproachtotheBalanceofTrade
ElasticitiesandJCurves
TheCurrency-ContractPeriod
ThePass-ThroughPeriod
TheEvidencefromDevaluations
TheAbsorptionApproachtotheBalanceofTrade
ITEM17.1:THEPASS-THROUGHEFFECTANDPROFITS
TheMonetaryApproachtotheBalanceofPayments
Summary
Exercises
References
InternetApplications
APPENDIX17.1StableForeign-ExchangeMarketsandtheMarshall-Lerner
Condition
18EXCHANGERATETHEORIES
TheAssetApproach
Sterilization
ExchangeRatesandtheTradeBalance
OvershootingExchangeRates
CurrencySubstitution
TheRoleofNews
ForeignExchangeMarketMicrostructure
Summary
Exercises
References
InternetApplications
19ALTERNATIVEINTERNATIONALMONETARYSTANDARDS
TheGoldStandard:1880-1914
TheInterwarPeriod:1918-1939
TheGoldExchangeStandard:1944-1970
ITEM19.1:THEINTERNATIONALMONETARYFUND
TheTransitionYears:1971-1973
FloatingExchangeRates:Since1973
TheChoiceofanExchange-RateSystem
OptimumCurrencyAreas
TheEuropeanMonetarySystemandtheEuro
TargetZones
CurrencyBoards
ITEM19.2:SPECULATIVEATTACKSANDTHEMEXICAN
ANDASIANFINANCIALCRISES
InternationalReserveCurrencies
CompositeReserveCurrencies
MultipleExchangeRates
Summary
Exercises
References
InternetApplications
20INTERNATIONALBANKING,DEBT,ANDRISK
TheOriginsofOffshoreBanking
ITEM20.1:FROZENDOLLARSINMANILA
ImernationalBankingFacilities
OffshoreBankingPractices
ITEM20.2:ISLAMICBANKING
InternationalDebt
IMFConditionality
Country-RiskAnalysis
ITEM20.3:BLOCKEDFUNDS
Summary
Exercises
References
IntemetApplications
21OPEN-ECONOMYMACROECONOMICPOLICY
ANDADJUSTMENT
InternalandExternalMacroeconomicEquilibrium
TheISCurve
TheLMCurve
TheBPCurve
Equilibrium
MonetaryPolicyunderFixedExchangeRates
FiscalPolicyunderFixedExchangeRates
MonetaryPolicyunderFloatingExchangeRates
FiscalPolicyunderFloatingExchangeRates
InternationalPolicyCoordination
ITEM21.1:THEPLAZAAGREEMENT
TheOpen-EconomyMultiplier
Summary
Exercises
References
InternetApplications
Glossary
Index